Part 1 of this false billing scheme case study in the July/August issue discussed the perpetrators, the organization, and the initial investigation of a huge disbursement fraud. This column discusses the investigation, lessons learned, and recommendations to prevent future occurrences of false billing schemes.

To summarize the case, a legitimate vendor named “Richard” submitted false invoices to the Washington State Liquor Control Board and received almost $840,000 in unauthorized payments over a three-year period for services he didn’t provide. “Gerry,” an accounts payable clerk, processed the fraudulent transactions. These transactions included inflated weights on legitimate deliveries, deliveries that didn’t occur, and duplicate billings. In fact, 76 percent of all invoices from this vendor were false!